Armstrong update: AHF Products emerges as buyer
lin the 11e hours of Armstrong Flooring’s Chapter 11 bankruptcy suit, AHF Products has emerged as a buyer of the bankrupt flooring company — the company it spun off four years ago.
AHF Products said it has reached an agreement to purchase certain assets from Armstrong Flooring, subject to court approval. The sale hearing is currently scheduled for July 12, where the court will be asked to approve the sale. “We believe this transaction represents a tremendous opportunity for both AHF Products and our channel partners, as we continue our growth as a leader in the flooring industry,” said Brian Carson, president & CEO of AHF Products.
AHF Products is not the only outside entity involved in the purchase. The consortium of buyers consists of AHF, LLC and Gordon Brothers, which are expected to acquire substantially all of the company’s North American assets for $107 million in cash and the assumption of specified assumed liabilities. Armstrong Flooring said it expects it will also announce final purchase agreements for its Chinese and Australian businesses soon, after it receives binding bids to acquire each.
If the sale were completed, Armstrong Flooring would be able to pay its secured creditors, Pathlight Capital and Bank of America NA, who owe $98 million and $65 million respectively. Pathlight Capital and Bank of America would also be repaid on a $24 million loan that took Armstrong Flooring into a bankruptcy sale. Other priority payments include administrative fees and pre-bankruptcy bonuses promised to executives.
Armstrong Flooring and AHF Products are neighbors of Lancaster County with shared ancestry. In fact, AHF was founded in 2018 following the acquisition by American Industrial Partners (AIP) of the Armstrong Flooring timber division. According to Don Maier, then CEO of Armstrong Flooring, the transaction was intended to enable Armstrong Flooring to focus on LVT, its rigid core and its wide range of resilient products, including vinyl compound tiles and resilient slabs. “After careful evaluation of multiple options, we determined that separating the resilient and timber companies is the best way to enable both companies to better realize their core strengths,” Maier said at the time. “With this divestment, Armstrong will become a pure resilient flooring company targeting a key growth area within the industry by leveraging our rich legacy to drive continued innovation and growth.”
Since inception, AHF Products said it has grown rapidly in both the residential and commercial floor segments by innovating and broadening its product offerings, through its stable of world-class brands and distribution channels. The company’s investments in new brands, products and capabilities, both organically and through acquisitions, have fueled this growth. The company said its strategic acquisitions have been a major driver in expanding its reach and product offerings to provide its customers with leading commercial and residential products, including hardwood, resilient and laminate. That is, and will remain, its strategy going forward, the company said.